How Long Can a Lawyer Hold Your Money After You Settle a Personal Injury Case?

After the hard work of securing a personal injury settlement, one pressing question remains: “How long until I receive my money?” The time between reaching a settlement and receiving your funds can feel like a waiting game, especially if you’re dealing with medical bills, lost wages, or other financial challenges resulting from your injury. At John J. Malm & Associates, we understand the importance of a timely settlement distribution, and we’re here to guide you through each step of the process.

“A personal injury settlement is hard-earned and is rightfully yours,” says John J. Malm, founder of John J. Malm & Associates. “Our priority is to expedite the process of getting you paid while ensuring that all details, including lien resolutions and accurate disbursements, are handled properly. We’re here to make this final step as smooth as possible.”

This guide will walk you through the key steps involved in finalizing your settlement, explain why certain processes may take time, and outline what you can expect as your attorney works to distribute your settlement.

1. The Settlement Process: From Agreement to Payment

Once you’ve reached a settlement with the defendant or their insurance company, your attorney and the insurance company formalize this agreement. This involves drafting a settlement release document, which must be signed by you, the plaintiff. The release is a legally binding document that states you agree not to pursue further legal action related to the injury or accident in exchange for the settlement amount. Once signed, the insurance company can issue the payment.

Under Section 2-2301 of the Illinois Code of Civil Procedure, insurers have 30 days to release settlement funds after receiving the signed release form. However, if there are administrative or processing delays, this timeframe could extend slightly. Your attorney will monitor this step and communicate with the insurer to avoid unnecessary delays.

2. Receiving the Settlement Check

Once the insurance company processes the settlement and issues the check, it will be sent to your attorney’s office. The check is typically issued in both your name and your attorney’s name and is deposited into the attorney’s IOLTA trust account. Holding the funds in this account ensures that the money is properly allocated and allows for any necessary disbursements to be made in compliance with legal requirements.

The funds are deposited into the trust account to allow your attorney time to fulfill any outstanding obligations, such as lien payments, which must be settled before you receive your final payout.

3. Handling Lien Resolutions: A Crucial Step in Settlement Distribution

One of the main reasons an attorney may hold settlement funds is to resolve medical liens and other third-party claims. Liens are legal claims placed on your settlement by entities that provided medical treatment or services related to your injury. These include hospitals, healthcare providers, insurance companies, and even government programs like Medicare and Medicaid.

Liens must be resolved before the settlement funds can be disbursed, as these providers have a right to be compensated for the care they provided. This process may include negotiating with lienholders to reduce the lien amounts, ensuring you retain a larger portion of your settlement. While lien resolution can vary in complexity, it typically adds several weeks to a few months to the process.

Common Types of Liens in Personal Injury Cases

1. Healthcare Provider Liens: Hospitals, doctors, and physical therapy centers may have claims on your settlement if they provided services for your injury.
2. Health Insurance Liens: Health insurers, including Medicaid and Medicare, may claim a portion of the settlement if they covered your medical bills.
3. Workers’ Compensation Liens: If workers’ compensation paid any portion of your medical expenses, they may have a claim on your settlement.
4. Medicare and Medicaid Liens: Government health programs have strict rules on lien recovery and require careful compliance.

4. Distribution of Funds: Getting You Paid

Once all liens are resolved and other deductions are finalized, your attorney will prepare a settlement statement. This document itemizes the breakdown of your settlement, including attorneys’ fees, case costs, lien payments, and the net amount you will receive. You will review and sign this statement to confirm the accuracy of the disbursement.

The settlement funds are then distributed according to this statement. Your attorney deducts fees and costs, pays any outstanding liens, and then releases the remainder to you. At this point, you will receive your portion of the settlement directly from your attorney, completing the settlement process.

How Long Does It Take to Get Paid?

While every case is different, the settlement disbursement process typically takes between four to eight weeks after a settlement is reached. However, certain factors can prolong this timeline:

• Lien Complexity: Some liens, particularly those involving Medicare or Medicaid, may require extensive negotiation or formal lien reduction processes. Additionally, some lienholders may be slow in responding to lien negotiations because of the volume of liens they handle.
• Large Settlement Amounts: High-value settlements may be subject to additional scrutiny and administrative processes.
• Insurance Company Delays: In some cases, the insurance company may delay processing the settlement payment due to administrative backlogs.
• Case-Specific Factors: Some cases may involve complex liability or third-party claim situations that require further documentation and verification.

Your attorney’s role is to expedite each step as much as possible, coordinating with lienholders, insurers, and other parties to minimize delays and ensure a smooth distribution process.

Why Your Lawyer Holds Your Money After a Settlement

An attorney’s primary responsibility when holding settlement funds is to comply with legal obligations. Holding your money in a trust account during lien negotiations and final disbursement ensures that each obligation is fulfilled and that you receive your rightful share. Your lawyer cannot release funds until all required lienholders and third-party claims are settled to avoid legal issues and to honor the terms of the settlement agreement.

Ensuring Timely Disbursement: What You Can Expect from Your Lawyer

At John J. Malm & Associates, our experienced Illinois personal injury attorneys prioritize transparent communication throughout the entire settlement process, ensuring our clients in Naperville, St. Charles, and beyond are informed and empowered at every step. We know how important it is for you to receive your funds as quickly as possible, especially after dealing with the financial impact of an injury. Our approach includes:

• Prompt Settlement Processing: As soon as the settlement agreement is reached, we act swiftly to get your release signed and submitted to the insurance company.
• Efficient Lien Negotiation: Our attorneys work to resolve liens as quickly as possible and negotiate to reduce lien amounts, ensuring you keep more of your settlement.
• Detailed Settlement Statement: We provide a clear and thorough breakdown of fees, liens, and final disbursement amounts for your review before distribution.

By taking proactive steps to streamline the process, we work to minimize delays and expedite the release of your settlement funds.

Final Thoughts

Navigating the personal injury settlement process can feel complex, but a skilled attorney will guide you through each step to ensure your rights are protected and that you receive your settlement funds as quickly as possible. From lien resolution to final distribution, John J. Malm & Associates is committed to helping clients in Naperville, St. Charles, and surrounding areas receive the compensation they deserve with minimal delay.

Our top-rated Illinois persona injury lawyers handle all the legal details of the disbursement process, ensuring that you can focus on recovery while we work to get you paid. Contact our team today to learn more about the settlement process and how we can support you in your personal injury case.